She can apply for Tier 1 Entrepreneur Visa and will get 3 years visa.
Her 10 legal years will complete on April 2014 and would then be eligible for Indefinite Leave to Remain.
It's not possible anymore to keep studying for 10 continuous years and apply for residency. Read This :
http://www.admin.cam.ac.uk/offices/inte ... limit.html
She would have to switch into another category... possibly for Tier 1.
There are two subcategories in which one can apply: 1) Sponsor 2) Venture Capital
1) Sponsor : If you have £50,000 funds in your UK bank account, you can sponsor yourself. Otherwise, you can find non-UK bank account holders to sponsor you. You must run a Graduate Level Business (NQF Level 4 or Above) and open a company within 90 days before filing Tier 1 Application. You must also submit a Business Plan and have some contract, etc.
2) Venture Capital : UK based firms (governed under Financial Services Authority) who invest their capital in projects or businesses in which there is substantial element of risk, typically new or expanding business. They can sponsor you for £50,000. Only after getting visa, you have to open a company within 6 months. You can run any business if you are sponsored by Venture Capital.
NOTE : If PSW holder is applying via sponsor, they just need to show £50,000. They can even divide this money into team. However, now UKBA is very strict about this sponsor rule and may ask for proof of transfer of funds anytime.
------ In recruitment & consultancy business for more than 5 years. I only provide advice with first hand information. Please do not take my advice in legal perspective. For find more about venture capital investment, kindly contact me ------